For the dissolution of partnership firm, Match the following -
| List 1 | List 2 |
| A) Consent of all the partners | I) Dissolution by Court |
| B) Business of the firm becomes illegal | II) Dissolution on happening of certain contingencies |
| C) Death of a partner | III) Compulsory Dissolution |
| D) Partner becomes insane | IV) Dissolution by Agreement |
Choose the correct answer from the options given below.
Answer & explanation
Correct answer: option 4
The correct answer is option 4- A-IV, B-III, C-II, D-I.
| List 1 | List 2 |
| A) Consent of all the partners | IV) Dissolution by Agreement |
| B) Business of the firm becomes illegal | III) Compulsory Dissolution |
| C) Death of a partner | II) Dissolution on happening of certain contingencies |
| D) Partner becomes insane | I) Dissolution by Court |
* Consent of all the partners- Dissolution by Agreement: A firm is dissolved by agreement in these cases-
- (a) with the consent of all the partners or
- (b) in accordance with a contract between the partners.
* Business of the firm becomes illegal- Compulsory Dissolution: A firm is dissolved compulsorily in the following cases:
- (a) when all the partners or all but one partner, become insolvent, rendering them incompetent to sign a contract;
- (b) when the business of the firm becomes illegal; or
- (c) when some event has taken place which makes it unlawful for the partners to carry on the business of the firm in partnership.
* Death of a partner- On the happening of certain contingencies: Subject to contract between the partners, a firm is dissolved :
- (a) if constituted for a fixed term, by the expiry of that term;
- (b) if constituted to carry out one or more ventures, by the completion thereof;
- (c) by the death of a partner;
- (d) by the adjudication of a partner as an insolvent.
* Partner becomes insane- Dissolution by Court: At the suit of a partner, the court may order a partnership firm to be dissolved on any of the following grounds:
- (a) when a partner becomes insane;
- (b) when a partner becomes permanently incapable of performing his duties as a partner.